Sarcouncil Journal of Economics and Business Management

Abstract: This study determined the effect of taxation on standard of living in Nigeria from 1990 to 2023. Company income tax, value-added tax, education tax and personal income tax were adoped as the proxies of taxation while per capita income was adopted as the indicator of standard of living. Annual time series data used in this study were obtained from Central Bank of Nigeria (CBN), Office of the Federal Inland Revenue Service and Annual Abstract of statistics of the National Bureau of Statistics. The major techniques of data analysis adopted include Augmented Dickey-Fuller (ADF) unit root test, correlation matrix of multicollinearity test, bounds cointegration test and Autoregressive Distributive Lag (ARDL) approach. The key findings of the study showed that company income tax has a positive and significant effect per capita income in Nigeria. Also, value-added tax has a positive and non-significant effect on per capita income in Nigeria. Contrarily, education tax has a negative and significant effect on per capita income in Nigeria. Lastly, personal income tax has a positive and significant effect on per capita income in Nigeria. Premised on the findings, the study concluded that taxation play a vital role in improving standard of living in Nigeria. The study recommended among others that the government should strengthen and optimize the administration of company income tax and personal income tax, given their positive and significant impact on per capita income. This can be achieved through improved tax compliance mechanisms, digitalization of tax collection systems, and reduction of tax evasion and avoidance.